HONG KONG, Feb 28 (Reuters) - Hong Kong’s Financial Secretary said on Wednesday the city’s red-hot property market will gradually come under pressure as more flats hit the market and interest rates are expected to rise.

Hong Kong is one of the most expensive housing markets in the world, where private home prices shattered historic records for the 15th month in a row in January, rising 1.27 percent month-on-month and 15.4 percent year-on-year, the latest government data on Wednesday showed.

While Financial Secretary Paul Chan did not announce any immediate measures during his annual budget speech to put a lid on rocketing prices, he warned potential home buyers should “carefully assess the risks” before jumping into the market.

“Over the past few years, with a tight supply of residential flats, ultra-low interest rates and an influx of capital, property prices have soared beyond the affordability of ordinary citizens,” he said.

“However, I believe that the key factors underpinning soaring property prices over the past few years are gradually undergoing fundamental changes... The changes in these key factors will put pressure on the property market.”

Chan said the private sector is expected to produce an annual average of 20,800 flats in the five years between 2018 and 2022, marking a 50 percent surge over the past five year’s annual average figure.

He also projected a total supply of 100,000 public housing units in the next five years.

Chan did not announce any changes to the current tax and regulatory policies which have largely failed to stop home prices from climbing since early 2016.

Analysts expect home prices, which surged 16.7 percent last year, to climb a further 5 to 20 percent in 2018. Many have also said the impact of expected U.S. interest rate hikes to be limited as Hong Kong’s current rates are very low.

Land premium is expected to help the government fetch HK$121 billion ($15.46 billion), or a fifth of its total projected revenue for the fiscal year 2018-19.

For the current fiscal year, which will end on March 31, the revised land premium estimates jumped 62 percent when compared to the original estimate, reaching HK$163.6 billion, partly thanks to a year of record-breaking land sales.

On the other hand, a rental index that has been climbing to historic peaks for 10 months in a row dropped for the first time in over a year, with its January figure dipping 0.32 percent from December. ($1 = 7.8288 Hong Kong dollars) (Reporting by Venus Wu; Editing by Gopakumar Warrier and Michael Perry)